news Prime Minister Malcolm Turnbull has avoided directly answering the question of whether he still stands behind the NBN company’s existing cost estimates with respect to its use of HFC cable and copper technologies, instead claiming that the Coalition Government was cleaning up the NBN “mess” which he said Labor had created.
As part of the Coalition’s Multi-Technology Mix approach to the National Broadband Network, the NBN company has bought the HFC cable networks owned by Telstra and Optus. In Optus’ case, the network buy came at a cost of some $800 million.
However, internal documents leaked this afternoon have revealed that the NBN company is considering overbuilding the Optus HFC cable network, in a move which dramatically validates long-standing criticism that the HFC cable technology could not meet Australia’s future broadband needs.
The documents — dated 3 November — openly state that Optus’ HFC network is “not fully fit for purpose”. The document explicitly states that some 470,000 premises in the Optus HFC cable footprint would need to be overbuilt, with a significant impact to the NBN company’s peak funding requirement ranging between $150 million and $600 million. The document also explicitly states that the NBN company will miss its financial year 2017-2018 HFC ready for service target.
This afternoon, Shadow Communications Minister Jason Clare asked Turnbull in Question Time whether he could “guarantee” that all of the ‘Multi-Technology Mix’ technologies which the Coalition is introducing for the NBN — “including HFC” — would not blow out in costs any further.
In response, Turnbull mocked Clare for not asking him more questions over the two years Turnbull was Communications Minister.
“I really thank the honourable member for the question. That was very generous of him,” Turnbull said.
The Prime Minister went on to attack Labor’s implementation of the NBN, which he described as ” a shockingly reckless failure of policy and process”. “When they embarked on the project, they had no idea what it would cost, and they had no idea how long it would take,” said Turnbull.
The Prime Minister said Labor had committed the Government to a “staggeringly ambitious project” with little research, describing it as ” the craziest thing done by the Labor Party in six years of misgovernment”.
“Now, as is the lot of the Liberal and National parties, we’ve inherited this mess, and we’ve had to clean it up,” said Turnbull.
“Most bad projects get worse, this one is getting better. And it’s getting better because we changed the management, we changed the board, we gave them the flexibility to get on with the job.”
Turnbull said for the first time, the NBN company now actually knew what the NBN project would cost. In contrast, he said, the NBN project would be completed under the Coalition for $30 billion less and between six eight years sooner than if Labor’s plan had been continued with.
However, the release of the leaked NBN document detailing increased costs associated with using Optus’ network appears to show that the Coalition may not have as concrete a grasp on the NBN’s costs under the MTM model as it has assumed.
Former NBN chief executive Mike Quigley also recently released detailed analysis earlier this month showing that the up to $15 billion blowout in the cost of the NBN was primarily due to the HFC cable and copper technologies being used as part of the MTM mix approach.
It is not currently clear whether Turnbull was aware of the Optus HFC cable problems — and the associated cost blowout — when he was answering Clare’s questions.
The internal NBN document detailing the Optus issues was released towards the end of Question Time. It does not appear that Communications Minister Mitch Fifield was aware of the document — or the issues it contains — when he was asked similar questions during Senate Question Time today.
In his response to similar questions in the Senate, Fifield reaffirmed his faith in the fitness of the HFC cable technology for use with respect to the NBN project, specifically stating that the Optus HFC cable network would be used.